SEC approves PPP listing rules

MANILA, Philippines – The Philippine Stock Exchange (PSE) is opening its doors to companies which have bagged public-private partnership (PPP) projects worth at least P5 billion, after the local corporate regulators approved the listing rules on Thursday, November 10.

The Securities and Exchange Commission (SEC) said in a statement that corporations with a PPP contract worth at least P5 billion and special purpose companies (SPC) incorporated by the holder of a PPP contract are allowed to apply for listing on the local bourse.

The SEC said this is in line with President Rodrigo Duterte’s openness to continue former president Benigno Aquino III’s infrastructure thrust. (READ: Duterte admin to roll out all stalled PPP deals by 2017 – NEDA)

“In support of President Duterte’s programs to sustain economic growth, listing PPP companies at the bourse will provide additional source of funding for PPP projects. The approved PPP rules allow the PPP companies to raise funds from the capital market,” the SEC told reporters.

The SEC said these approved listing rules will be implemented by the PSE in close coordination with the country’s PPP Center.

This comes after over a year of consultations among the PSE, SEC, PPP Center, and the Asian Development Bank, which started in August 2015.

Relaxed rules

Under the approved listing rules, companies without the required 3-year track record can still apply for listing on the PSE if they comply “with the rest of the general listing requirements set forth in the PSE Main Board.”

The SEC also prohibits existing shareholders of a PPP firm from offering their shares during the initial public offering (IPO) period.

The listing rules also require listed PPP companies to submit to the PSE a business plan, including proposals for liquidation and new businesses, at least 3 years before the scheduled expiration of their PPP contract.

Should the firms fail to submit the required business plan, the PSE may impose sanctions for violation of the PSE Listing and Disclosure Rules.

“The implementation of these rules shall be made in coordination with the PPP Center of the Philippines and SEC,” the PSE had told the SEC in a letter.

Before applying for an IPO, the rules noted that PPP companies should complete first the construction work, or a phase thereof, and start commercial operations.

There are currently 10 PPP deals that are being procured by the Philippine government: Light Rail Transit Line 6 (LRT6) Project (P65.09 billion), the Regional Prison Facilities PPP project (P50.20 billion), the New Centennial Water Source-Kaliwa Dam deal (P18.72 billion), the Road Transport Information Technology Infrastructure deal (P298 million), the Davao Sasa Port Modernization project (P18.99 billion), and the bundled 5 regional airports (cumulatively worth P108.19 billion). – Rappler.com